Fine Art, Jewellery & Specie Market Update

20 February 2019

After an unprofitable year in 2017 with a loss of over £2 billion, the Lloyd’s market directorate started to impose a performance improvement initiative on syndicates during 2018. This resulted in a small number of syndicates closing or exiting unprofitable classes of business and an overall 5% reduction in market capacity for 2019. The ‘Specie’ classes of business – Fine Art, Jewellers’ Block, Cash in Transit and General Specie are, as a whole, still profitable for the market but we are certainly seeing more discipline from insurers as a result of the Lloyds initiative.

Despite huge catastrophe reinsurance claims to the market from the Californian wildfires, Hurricanes Michael and Florence and Typhoon Jebi, the reinsurance renewal season has seen premium rates remain largely unchanged, reducing pressure on insurers’ margins.

Fine Art

Although Fine Art insurance is generally the most profitable of the ‘Specie’ classes, the losses from other classes of business have affected capacity with a handful of syndicates no longer writing the business. A number of insurers have gone through mergers recently, with the most notable in the Fine Art World being the acquisition of XL by AXA creating a huge global insurer for the Fine Art insurance business. Whilst mergers have caused some contraction in the total Fine Art capacity available in Lloyd’s, one notable exception is Liberty Specialty Markets who have increased their maximum line size for Fine Art and Specie to USD 250 million which is available throughout their global network.

Jewellers' block

The Jewellers’ Block market is edging away from the softening that has occurred over the last three to five years with a number of markets now revising their appetite. Whilst pricing has yet to change dramatically, we are now seeing increased attention paid to risk management and tightening of the policy wordings provided, with third party infidelity an aspect of coverage that Insurers are routinely looking to remove. Reductions are increasingly hard to obtain with incumbent markets and alternative markets clearly looking at new business with a more limited appetite. Although capacity remains strong, focus on underwriting performance is putting insurers under increasing pressure to cut less profitable accounts from their portfolios.

Cash in transit

Over recent years the Cash in Transit segment of the market in Lloyd’s has made an overall loss, resulting in insurers taking a much closer look at risk selection, premium rating and policy wordings. Those clients who are well managed and can demonstrate how they can control their risks are standing apart from others.

Although we have not seen a significant reduction in capacity for good clients, we are certainly seeing insurers analysing risk with a much more critical eye, having a greater focus on making a profit rather than just growing revenue. As a result, risks in certain territories are becoming increasingly difficult to place, particularly in Latin America with Brazilian Cash in Transit being the biggest challenge. Big losses in Brazil at banks and security companies have hit the General Specie and Cash in Transit Insurance sector and capacity for these types of risks is limited, with only a handful of insurers still involved in writing this business. Those that have continued to write Brazilian business are demanding significant premium increases coupled with reduced limits and strict conditions around security levels.

General specie

The last quarter of 2018 saw a series of claims from clients suffering losses which emerged after the insolvency of a major US precious metal refiner. This has resulted in increased resistance from insurers to offer specific insolvency coverage, without significant explanation or exposure control. The Metals and Mining industry is the most closely affected. Although it is still too early to predict the impact of this loss on the marketplace it is certainly likely to have some impact on coverage and potentially pricing in the future.


As the market gets harder and insurers are more cautious with their decision making process, setting your business apart from others will be key. We expect this to continue throughout 2019, with the availability of premium reductions and the enhanced wordings that we have seen in recent years beginning to cease or at least slow down. The depth and quality of underwriting information provided by clients, is likely to have a direct impact on the willingness of insurers to compete for their business.

Aggregations in specific areas such as catastrophe zones (notably California) and Brazil are continuing to be closely reviewed resulting in insurers reconsidering how they wish to deploy their capacity. Understandably insurers will be reserving capacity for other classes of business where their return on investment may be higher.

For further information please contact, Barry Vickery, Deputy CEO of Fine Art, Jewellery & Specie on +44 (0) 3811 9506